Political Economy of the Information Society – a Southern View 1

Briefing paper prepared for the WSIS Papers Series of

Instituto del Tercer Mundo (ITeM)

“Neo-liberalism is principally a political project of embedding market values and

structures not just within economic, but also within social and political life. Its
objective is a reshaping of power relations.” 2
Throughout the 90s, the neo-liberal project has successfully pushed traditional
development agenda away from global policy spaces, and increasingly from national
policy levels as well for many countries. At the turn of the century, it achieved a major
strategic advantage by grasping the theoretical space of information society developments
in the South, and constructing it to its own advantage. In this respect, the neo-liberal
agenda was helped enormously by three factors in the South – first, the governments of
the South took the new ICTs as primarily an economic opportunity – for exports and
creating jobs; second, the private sector, mainly MNCs, was taken as the natural leader
not only in providing technology solutions but also in interpreting the new technology
paradigms to public policy makers which gave them enormous clout in public policy
making; and third, the traditional development sector3 , long suspicious of globalization
designs inherent in global communication technologies, took a somewhat adversarial, or
at least a non-engaging, attitude to the new possibilities opened by ICTs for development.

The origins of ICTD theory

At the global level, the early techno-centricism of “global information infrastructure” – a
concept put forwards by the US (in 1993) - was moderated towards greater social
acceptability in the notion of an Information Society – a notion proposed by the EU (in
1995). The North also sought to occupy the theoretical space with regard to the
implications of the emerging information society (IS) for the global South. Such a theory
began taking shape in OECD and G-8 meetings, and in quick succession the DOT Force
initiative and then the DOI report, authored by a private consulting firm, along with a
North based Foundation and UNDP, laid the framework of what was to be uncritically
accepted as the mainstream ICTD theory. Such a policy framework, that valorized the
concept of business model in development arena while providing conceptual categories
quite alien to traditional development practice (some of these categories are analyzed
later in this paper), sat well with the IT and telecom ministries in developing countries,
who were also in charge of ICTD. These ministries or departments were preoccupied
mainly with promoting the IT industry and hence also quite comfortable with the lingua
of the IT and telecom MNCs, with whom they had to transact intensively. Even in

1
Anita Gurumurthy and Parminder Jeet Singh, IT for Change.
2
Garry Rodan, Neoliberalism and Transparency: Political Versus Economic Liberalism, Working Paper
No. 112, September 2004, Murdoch University, http://wwwarc.murdoch.edu.au/wp/wp112.pdf
3
Used here to refer to actors involved in diverse development sectors – from health, to education, food
security and sustainable development. The term is used to distinguish these actors from the new community
of ‘ICTD’ actors.

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developing policies for ICTD, the private sector, mostly dominated by MNCs from the
North, remained the principal advisor of these governmental agencies.

Therefore, in the given context of extraneously developed theory, ICTD practice in the
local contexts in countries of the South has not delivered much more than piecemeal
results. ICTD has taken a typical applications-based, quick-fix approach, without a
blueprint for systemic change. As more actors in the developing countries have begun to
understand the extent and significance of IS changes, and its implications for re-shaping
development, there is a growing dissatisfaction with the neo-liberal ICTD frameworks.
While multi-lateral agencies have made some progressive adjustments in their ICTD
vision, incorporating some new paradigms that have become too forceful to ignore, open
source and open telecom access being two principal examples, an essentially reactive
orientation of ICTD to the dominant neo-liberal paradigm has meant that the
unprecedented opportunity for development in using the new ICTs continues to be
wasted.

The real issues involved in a systemic approach to ICTD - of ICT infrastructure as crucial
social and development infrastructure, which needs to be a public provision; of ensuring
rapid diffusion of technology innovation in an equitable manner; and of making needed
investments in transformation of institutions and organizations engaged in development
activities - all lie in the realm of political economy. These may not be amenable to the
simple logic of economics by which neo-liberals like to run the world. It is necessary to
see the emerging IS in a political economy framework from the point of view of
developing countries. And the starting point for this exercise is to develop a new theory
of ICTD, or an IS for the South 4 , that gives the historical, the social and the political
sufficient space alongside the economic.

A recent report from the UN ICT Task Force 5 identifies a failure of current frameworks,
flagging the depoliticized context of ICTD;

“However, rather than taking the approach to systematically “problematize” ICT

in development policy and programs, there has been a tendency among
practitioners to depict ICT almost as a “black-box” solution, and a solution
situated within a “win-win” world of common interests between developed and
developing countries.”

In fact, the closing phase of the WSIS represents a complete breakdown of the
engagement of the South and Civil Society with the dominant discourse of the IS,
determined largely by the governments and the MNCs of the North. The extreme
posturing by the North, especially the US, in the WSIS, with respect to all substantive

4
The concept for an IS for the South captures systemic issues of institutional and societal changes better
than ICTD.
5
“Innovation and Investment: Information and Communication Technologies and the Millennium
Development Goals” - Report Prepared for the United Nations ICT Task Force in Support of the Science,
Technology & Innovation Task Force of the United Nations Millennium Project.
www.unmillenniumproject.org/documents/ Innovation%20and%20Investment%20Master.pdf

2
issues that matter to the South, is tantamount to questioning the very rationale of WSIS
itself. The emerging context is one where development actors from the South need to
make a clean break from the existing paradigms of the IS largely determined by the
North, and begin a process of articulating a new paradigm of the IS that serves the
development interests of the South best. This exercise needs to begin with problematizing
the existing concepts of ICTD through an analysis of their political economy.

Unpacking ICTD
It is useful to re-visit the main concepts of the dominant paradigm of ICTD and analyze
them from a political economy lens. This re-conceptualization has to then be tied into a
viable theory of a development oriented IS for the South.

• ICTD policy – ICTD policy in most developing countries is the domain of IT and
telecom departments. These departments focus more on business and technology
issues related to ICTs and in many countries carry a strong pro-market bias 6 . As a
result, ICTD policies are excessively pro-market, and not sufficiently development
oriented. The development departments in these countries do not have a good ICTD
orientation, and even if they do have it, they are handicapped by the lack of important
ICTD policy instruments in their hands. ICTD implicates important issues of
convergence, both in the areas of policy and practice, from infrastructure to common
service outlets, and these are still often in the domain of IT departments. However,
the situation is changing as the ICTD opportunity is getting more widely understood,
and the core development departments are coming up with more development-
oriented models.

• Capacity Building - Capacity building, another important concept in ICTD, has also
taken specific political economy hues. The dominant paradigm interprets institutional
capacity building as training regulators for a pro-market telecom policy, and
individual capacity building as training ‘knowledge workers’ to fit into global ICT
value chains. There are much greater, and often more crucial, capacity requirements
both at institutional/ organizational and individual/community levels for shaping the
IS opportunity for development, but these are greatly under-theorized.

• MSPs - Multi-stakeholder partnerships have figured centrally in the ICTD discourse.

While it is true that actors outside of governments have received some toehold in
policy spaces owing to such an approach, the context of MSPs in ICTD needs to be
examined more closely. The background of the MSP approach in ICTD is that the
private sector (usually MNCs) was seen as having the necessary expertise - in ICT
applications and paradigms, and therefore their advice was considered important in
making ICTD policy. Civil society has mostly been co-opted into such structures, to
keep the pretense of fair representation and has had little influence on shaping ICTD
models. Such MSPs have only helped propagate the dominant ICTD model, seldom
engaging with them critically. With the emergence of many more idea leaders in local

6
This assertion comes from the experience in South Asian countries, where the IT industry focus of
governments is especially strong. It may or may not be as true to the same extent for all developing
countries.

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 governments and civil society, especially in the traditional development sector, the
situation is certainly better poised today to build MSPs where the locus of control lies
with public bodies, representative of public interest, and not with the private sector
partners 7 .

• ICT infrastructure - The fact that mobile telephony has seen an exponential growth
over the last few years in practically every country and this has followed telecom
privatization in most countries has been used as an illustration of the triumph of neo-
liberalism in the ICT arena. A recent article by The Economist 8 has used the
argument of private sector led mobile telephony revolution to question donor
supported ICTD initiatives employing computers and telecentres in villages. The
essence of the article is that telephones, especially mobile telephones, are useful for
the poor, judging from their huge demand, and that computers and the Internet are of
no use. The article thus implies that the South should be content with mobile phones
and also be reassured that the market would not fail to respond to demand, if at all
there was any real need for computers and the Internet. The World Bank has also
repeatedly celebrated the mobile telephony phenomenon in a similar manner, using it
as the proof that markets will mostly be able to lead the IS transformations in the
South 9 .

From a development view point, it is important to understand that the IS is not about
telephony, but by its very definition, about the far reaching transformation in societal
institutions that the Internet and its associated technologies make possible. In the
North, ICTs themselves grew out of a dialectic between institutions and the market.
And therefore, a certain maturity of markets to respond to the needs of institutional
developments that constitute an emerging IS can be expected. However, in most
developing countries, the new technologies represent new institutional and
organizational opportunities that have to be realized mostly by conscious design. ICT
infrastructure, ICT hardware and software, and ICT capacities are the starting point
for such institutional/ organizational transformation that contains the promise of a
paradigm shift in achieving development goals. It cannot be expected that markets by
themselves will fulfill any of these crucial needs. Strong policy interventions and
substantial public investments are certainly needed for this purpose.

The ICT architecture needed for making the transition to a comprehensive ICT based
development strategy requires a country wide ICT infrastructure – which includes
connectivity, access, hardware and software as well as capacities at individual,
community and institutional/ organizational levels. As a starting point, it is important

7
For issues related to the ‘locus of control’ in MSPs in ICTD, see “Pro-Poor Access to ICTs - Exploring
Appropriate Ownership Models for ICTD initiatives” – three case studies carried out by IT for Change for
UNDP, interventions. http://www.itforchange.net/projects/#pro-poor
8
http://www.economist.com/printedition/displaystory.cfm?Story_ID=3742817,
“The real digital divide” , The Economist, Mar 10th 2005
9
“Financing Information and Communication Infrastructure Needs in the Developing World: Public and
Private Roles” - draft for discussion.
http://lnweb18.worldbank.org/ict/resources.nsf/a693f575e01ba5f385256b500062af05/04c3ce1b933921a58
5256fb60051b8f5/$FILE/financingICT_Draft.pdf

4
 that the policy imperative of providing connectivity as a public provision is explored,
as the very basic platform on which other requirements may be provided. A good
example of such provisioning is the rural broadband model taken up by the
Government of Andhra Pradesh in India 10 , where the government has fixed the price
of 2 MBPS connectivity to be provided in every village in the state at USD 2.3 per
month per connection, and has invited tenders for such provisioning. The
Government has promised to buy connectivity for its 40,000 offices in the state as
well as for citizen service centers in each village (22,000 of them). A private sector
led consortium has taken the contract and one district has already been wired
completely.

The lead by the public sector in developing conditions for capitalizing on the ICTD
opportunity is almost always necessary. Apart from connectivity, access infrastructure 11
as well as availability of cheap and appropriate hardware and software are also often
linked to policy and investment interventions by public bodies.

Global Public Goods argument – the last bastion of engagement with the dominant
ICTD paradigm
Frustrated with the governments of the North for doing little to address the new
development needs of the South in the face of the IS opportunities, civil society at the
WSIS employed the Global Public Goods argument in justification of a global tax or
voluntary contributions for financing ICTs in the LDCs. The countries of the North
however have paid no heed. While useful as a tactical argument to obtain financial
commitments from richer nations, the GPG proposition has obvious limitations. At one
level, arguing from within the economic paradigm, the problem with conceptualizing
ICTs even as an ‘impure GPG’ is that this implies an a priori acceptance of knowledge as
a GPG. However, the new economy is based on the principle of pricing knowledge, as the
most valuable resource, and therefore, in the present circumstances, the North is unlikely
to be persuaded by the argument that knowledge is a GPG. And the argument for
financing ICTD built on externalities of ICTs is also self defeating since the government
and MNC actors in the ICT arena in any case always seek to internalize these
externalities by ‘targeted’ initiatives like the Digital Freedom Initiative12 of the US
government which is directly linked to expanding market opportunities for US
companies, and MNC projects of building ICT capacities of school teachers in
developing countries on proprietary platforms.

The GPG argument engages the neo-liberals in their own language, that of self-interest.
However, such re-interpretations of development imperatives can be taken to illogical
limits, whereby all MDGs and even equity and social justice among the people of the
world are considered GPGs. Such interpretations of development issues by placing them
in an ‘obvious win-win’ situation de-politicize the issue of development itself. They
weaken and distract the required policy orientation for planning and making systemic

10
http://www.freepress.net/news/6124 and http://apts.gov.in/apbroadbandnetwork.html
11
Community access points
12
“Digital Freedom Initiative”: http://www.dfi.gov/ .

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development interventions, which as argued earlier here are especially required in the
ICTD arena.

It will serve the interests of developing countries better to conceptualize ICTD and IS for
development outside economics, in socio-political frameworks. As argued above, basic
ICT infrastructure, spoken of here in its broadest meaning, must be seen as a social
responsibility of the state and provided as a public service, in the same way as basic
education is seen today. While education was mostly about building knowledge and
capacities, the new ICT infrastructure is geared to providing not only these but also
institutional and organizational linkages and frameworks to maximize ‘opportunity’ for
every individual and every community.

Towards a new theory and practice of Information Society for the South
At the level of the broadest plan, investing in and evolving an ICT based development
strategy will involve simultaneous work at two levels. One level is the ‘ICT based
development grid’ – which will include connectivity, access, capacity and new
institutional/ organizational arrangements. At the other end, is an organic engagement of
communities with ICTs in a localized and contextualized manner, whereby they plug into
the ‘grid’ for and in pursuance of their self-determined ends.

At the community end, effort and investment need to go into enabling people to ‘own’ the
technology and its processes and thereby to make the best through linkages to the ‘grid’.
And in developing this ‘grid’, a lot of planning and investment has to go into the use of
ICTs for transformation of institutions and organizations involved with development
activity.

Two broad policy imperatives for achieving the above at national and global levels are as
follows:

• At national and sub-national levels, a clear distinction needs to be made between the
economic growth aspect of ICTs and its use to build a new development
infrastructure. Many requirements of a policy and enabling environment to achieve
best results on the two fronts are common. However, there can often be a policy
trade-off and this needs to be negotiated politically. In India, for example, the
interests of the domestic IT sector and the urban middle class, which have high stakes
in India’s position in the global value chain in the IT and ITES industry, may often be
in conflict with subsidized telephony for rural areas, policy support for open source
software, more open regimes for knowledge and content sharing on digital platforms
etc. The most important imperative at national and sub-national levels is to see the
core ICTD opportunity and activity-space as distinct from that of ICT for markets and
economic growth. The locus of development of policy and action for ICTD needs to
go out of the IT and telecom ministries into core development sectors. A new focal
point within governments that is oriented exclusively to the development aspects of
ICTs and geared to developing an ICT based development infrastructure in
collaboration with other departments is an important and urgent requirement for most
developing countries.

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• At the global level, in engagement with the donor community and IFIs, a good case
needs to be articulated for investing in such an ICT based development infrastructure
which is conceptualized as distinct from economic infrastructure. On development
aid, the donor and lending community seems to operate from a dilemma of whether
more resources need to be pumped into developing countries’ existing development
activities or to invest in institutional mechanisms that make for more efficient use of
existing resources. Advocates of neo-liberalism have used the latter line of argument
to cut down direct investments into development, and instead divert it to supporting
market based structures with minimum public intervention, with an implied assertion
that markets ensure the best utilization of resources, even in the scenario of
development needs. Infrastructural and institutional investments in ICT based
development gives a via media between these two donor approaches. The investments
in ICTD are not direct development investments, but they go into making
development activity much more effective and efficient. Developing countries need to
develop a good case for such ‘efficiency-inducing’ investments that are not
necessarily linked to the supremacy of a certain set of institutions - the markets, and
concomitant institutions that prop up the markets - in inducing efficiencies.
Efficiencies of development investment today are best achieved by developing an
ICT based development infrastructure as described earlier.

However, agreements about efficiencies are premised upon agreements about the
objectives of development. And here, the neo-liberal agenda may differ in significant
ways from traditional development thought built on the canons of equity and social
justice. It is important therefore that powerful South–South alliances are built, with
participation from across sub-national and local governments as well as traditional civil
society and grassroots organizations, for evolving a new paradigm of a development-
oriented IS for the South.